An increase of 0.5 per cent would add £320 a year to the average repayment charge on a typical £100,000 home loan.

Rates haven’t gone up since July 2007 – a decade ago.

The economists said that as well as having to react to the spending spree, the Bank of England would be forced to act to keep inflation in check as the Pound falls because Mr Corbyn had the keys to power.

The claims came with Labour forced to defend accusations it was relying on a “magic money tree” to fund its £300 billion borrowing binge.

Ruth Lea, adviser to Arbuthnot, told the Sun: “Labour have made it very clear they plan to slam up public spending and it would be a real ‘no no’ for the money markets.

“The ‘fiscal incontinence’ or ‘fantasy economics’ would be very bad for the Pound. And while spending may grow the economy more quickly in the short term the Bank of England would have to adjust by putting up interest rates.”

And it said a Corbyn government would lead to significant increases in both spending and taxation – requiring a huge rise in borrowing.

Nomura said that while the markets may welcome Labour’s plan for a ‘softer’ Brexit – it suggested Mr Corbyn would be willing to pay billions more on a divorce settlement.

George Buckley, chief UK economist, said: “A Labour government would represent a significant move to the left. Its spending plans would probably require the Bank of England to raise interest rates sooner than expected – because of the economic impact of the extra government spending that would take place.”

He added: “Higher interest rates would be needed to tackle rising inflation, especially if sterling takes the news badly and import costs rise.”

Jeremy Corbyn has promised to hike taxes and spend more if he becomes PM

Interest rates have remained at record lows ever since tumbling from 5.75 per cent in July 2007 to just 0.5 per cent in March 2009 during the credit crisis.

More than four million Brits have home loans with tracker or variable loans.

Nomura separately warned businesses slash investment in Britain because of Labour’s plans to take back control of the water industry, railways and the country’s energy networks.

Mr Buckley said: “If Labour pulls off a surprise win, while the higher level of taxes on business is likely to lead to a decline in investment on its own, the second-order impact from the nationalisation of key industries and infrastructure could accelerate under-investment for fear of further nationalisation.”

Tory Treasury Secretary David Gauke last night said: “As we have consistently said, Jeremy Corbyn’s coalition of chaos would damage our economy with higher borrowing, fewer jobs and more debt.

“This warning of a rise in interest rates – meaning homeowners would lose out – is yet another way ordinary working families would be hit in the pocket by Corbyn’s nonsensical economic policies.

“The only way to stop it is to vote for Theresa May on 8 June – for the right Brexit deal and a brighter future.”